Money is tight and you’re thinking “I can’t afford my life insurance premiums! Now What?”
Unfortunately, in this rough economy, a lot of people are struggling to pay their bills.
Far too many people simply allow their policy to lapse when they hit a financial roadblock.
This seemingly simple decision can turn a choppy ride into a dire financial emergency should an unforeseen accident happen in the meantime.
You will be relieved to hear that some of these tips do not require you to replace your current policy.
Let me show you some ways to keep your life insurance policy alive even when you can’t afford to pay your premiums!
6 Tips If You’re Having Trouble Paying Premiums
1) Reduce the Face Value of Your Policy
So you’ve reached the point when you are thinking “I can’t afford my life insurance policy!”.
We’ve all been through financial emergencies that make us reprioritize our spending habits. It’s part of life.
However, there are many areas that I would trim the fat from long before I let my life insurance policies go (and yes I have more than one policy!).
Thankfully, most term and permanent life insurance carriers allow you to reduce the face value of your policy one time!
Yep! You heard me right.
This will allow you to lower your premiums without losing all the benefits of your life insurance.
2) Reduce Your Premiums
If you have a universal life or whole life policy with some cash value built up in it, you may be able to reduce your premiums without affecting your policy’s guarantees.
Depending on your circumstances, this may give you room to skip a payment or two or possibly even enable you to stop making payments for years if you have enough cash value saved up!
So what if you have a term policy?
The good news is you may be able to skip or stop making payments if it was issued more than 10 years ago and you had to foresight to add a return of premium rider. Read more about return of premium below!
***Note: BE VERY CAREFUL to check the fine print. You need to know how reducing your premium will affect the policy’s guarantees. Ask your agent or the carrier about the details of your policy before moving forward.
3) Purchase a Less Expensive Policy
Term life insurance prices have been coming down! So if you are thinking “I can’t afford my life insurance premiums”, you may be able to replace your current policy with a new one that has the same benefits for less money!